Municipalities will see sharp increase in revenues

The Government has announced the municipalities will see a sharp increase in free revenues next year. “This will mean more and better services to citizens,” says Minister of Local Government and Regional Development, Liv Signe Navarsete.

The Government has calculated that real growth in the local government sector's revenues will total between NOK 5.25 and 6 billion in 2013.

“Of the total growth, close to NOK 5 billion will be free revenues. This will permit municipalities to continue to build kindergartens, schools, nursing homes and assisted living facilities throughout the country,” says Navarsete.

Next year’s growth comes on top of the municipalities’ already increased revenues this year.

“The local government sector will be strengthened already this year. New estimates show that tax revenues will increase by NOK 2.3 billion in 2012. 2013’s revenue growth of up to NOK 5 billion more in free revenues comes on top of the increased tax revenues in 2012. This bodes well for the provision of good municipal services going forward,” says Navarsete.

Norway’s strong population growth means there is a greater need for municipal services.

“As our population grows, municipalities have to expand their services. The growth in free revenues must therefore be viewed in connection with the fact that the local government sector will also have to increase its spending in 2013 due to the demographic changes,” says Navarsete. “But with the Government's proposal the municipalities will have greater leeway to keep pace with population trends.”

Despite the major revenue boost, economic freedom varies between municipalities.

“The residents of different municipalities have different needs. It is therefore crucial that the revenue increase is an increase in free revenues. It gives local authorities the freedom to adjust services to what is most needed for their own citizens. This is the most efficient way to spend the money,” says Navarsete.

Municipalities must manage their finances wisely, asserts the minister.

“A well-run municipality plans for the future and lays plans at an early stage for how to deal with changes in the composition of the population. This requires sound management of finances and good cooperation between politicians and the administration. Surveys show that most people are happy with the municipal services they receive. This suggests that the municipalities are doing their job,” says Navarsete.

• Municipal proposition 2013
• Corrected revenues per municipality (Excel)

The Ministry of Local Government and Regional Development’s media contact line: +47 22 24 25 00.